If you’re a homeowner, you might be looking for tips and tricks to pay off your home loan faster. 

Did you know one of the simplest ways to cut years off your home loan is by making fortnightly repayments? 

In this article, we uncover our top hacks for shaving years off your home loan and minimise the amount you spend on interest.  

%%Afraid you're not getting the best home loan?%%

- __Related:__ [How to pay off your loan faster with extra repayments ](https://www.lendi.com.au/inspire/finance/pay-off-your-loan-faster-with-extra-repayments/)
- __Related:__ [FREE eBook: 5 tips to pay off your home loan faster ](https://prismic-io.s3.amazonaws.com/lendiau/56ba1bf5-48d0-430a-adde-e731b41e789f_5+Tips+to+pay+off+your+home+loan+faster+-+Lendi.pdf) 
- __Related:__ [Can I shorten my home loan term? ](https://www.lendi.com.au/inspire/finance/can-i-shorten-my-home-loan-term/) 

## #1. Switch to fortnightly repayments 

A simple trick that can help you pay off your home loan sooner is making [fortnightly repayments](https://www.lendi.com.au/guides/home-loan-repayment/) instead of monthly repayments.  

Divide the amount of your monthly repayment by 2 and repay that amount on the same day every fortnight. 

Here's the maths: there are 12 months in a year, but 26 fortnights each year. By making fortnightly repayments you’ll pay the equivalent of an extra month each year. 

And that's not the only reason why switching to fortnightly repayments is a good idea.  

Lenders typically calculate interest daily, so making home loan repayments fortnightly instead of monthly reduces the amount of compounding interest you would normally pay. 

%%How much can you save by refinancing?%%

## #2 Find a lower interest rate but maintain your current repayment amount 

If you’re not [reviewing your refinancing options](https://www.lendi.com.au/home-loans/basics/refinance/) every 1-2 years, you could be missing out on competitive rates.  

If you’re able to secure a lower interest rate but continue making the same repayment amount as you are now, you'll be on course to pay your loan off early.  

You can find out if you're [eligible for a lower rate here](https://www.lendi.com.au/home-loans/search/). 

## #3. Round up your repayments 
Rounding up your repayment amount gives you a figure that is easier to remember and means you’ll be making extra [repayments](https://www.lendi.com.au/home-loans/repayment/) without even thinking about it. 

If you have to pay $1,800 each month, try to pay $2,000 instead. 

If you can afford to pay an extra $200 each month, it will reduce the interest your lender charges you and you'll be debt-free sooner.  

Even if you can only afford an extra $20 or $50 each month, every dollar counts and it can still make a difference. 

Try getting into the habit of saving coins and $5 notes. This small change will grow over time and can then be used for additional repayments or be kept as an emergency fund in case your circumstances change unexpectedly. 

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## #4. Use an offset account or redraw facility
If used effectively, an [offset account](https://www.lendi.com.au/guides/offset-account/) can help you save thousands of dollars in interest. 

Say you owe $200,000 towards your home loan and have $10,000 in an offset account, the $10,000 will be ‘offset’ against the amount payable on your home loan. This means you’ll only be charged interest on $190,000.  

If you're paying less in interest, try to make larger repayments to pay your home loan off early. 

A [redraw facility](https://www.lendi.com.au/home-loans/redraw/) allows you to access any extra repayments you make on your home loan. 

So, if you have the extra cash but aren’t sure if you’ll need it later on, you can make an extra repayment and simply withdraw the funds should you need them at a later date. 

This reduces the amount of interest you pay and allows you to access funds from any additional repayments you've made.  

%%How much can you save with an offset account?%%

## #5. Get your salary paid into your offset account 
One easy way to reduce the amount of interest you pay is to get your salary paid directly into your offset account. 

You can use this as a daily transactional account and access your money as frequently as you wish, but each day that money sits in the account means that you've saved a little in interest. 

Find out how much you could save with our [offset account calculator](https://www.lendi.com.au/calculators/home-loans/home-loan-offset-calculator/). 

## #6. Put your bonus towards your home loan 

If you are able to, there are huge benefits to making [additional repayments](https://www.lendi.com.au/inspire/finance/pay-off-your-loan-faster-with-extra-repayments/).  

Each extra repayment reduces the principal amount that you owe.  

Lowering this outstanding amount will, in turn, mean that the interest your lender charges will be lower. 

If you receive a lump sum payment, such as tax back, an inheritance or a work bonus, consider paying all or a portion of this towards your home loan to reduce the principal amount owed.  

Any substantial repayments can go a long way to reducing the term of your home loan. 

%%Wondering if you can save on your home loan?%%

## #7 Switch from Interest Only to Principal & Interest repayments 

If you’re on an [Interest Only loan](https://www.lendi.com.au/inspire/finance/can-you-extend-your-interest-only-home-loan/), you’ll be able to start paying down your principal and lowering your interest if you switch to a [Principal & Interest home loan](https://www.lendi.com.au/home-loans/repayment/). 

The sooner you do, the sooner you can start paying off your home loan.  

How much will your P&I repayments be? Find out in seconds using our [Repayment Calculator](https://www.lendi.com.au/calculators/home-loan-repayment-calculator/). 

%%Want free expert help with your home loan?%%

## What happens if you pay off your mortgage early? 

In some instances, some lenders will have prepayment penalty fees if you pay off your home loan too early. 

This is because lenders make money from the interest charged on home loans so if you pay it off too quickly, they’ll end up losing money. 

But, this won’t apply to all lenders and these penalty fees usually apply to the first few years of the home loan, not the entire loan term. 

It’s a smart idea to review the terms and conditions of your loan to find out if this will apply to you. 

If you have a fixed rate home loan, paying off your home loan early could also lead to [break fees](https://www.lendi.com.au/inspire/finance/loan-break-costs-explained-how-to-avoid/). 

![break-fixed-rate-formula](//images.ctfassets.net/o2gysnvd04sg/XsyofIokrZ3vWyznvOTWg/926f0db80933b8420d59710cda559b47/Lendi-Blog.png)

## Got a home loan question? Just ask! 

We're here to help. Get free expert guidance at a time that suits you. Choose a time to [chat with a Home Loan Specialist here](https://www.lendi.com.au/book-appointment/). 

The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions. 

Afraid you're not getting the best home loan?

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Find out what your new repayments might be in seconds.

How much can you save by refinancing?

How much can you save with an offset account?

Find out how much you could potentially save in interest. 

Wondering if you can save on your home loan?

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